Why Do FHA 221 (d) 4 Loans Take So Long?

Everybody loves the terms of an FHA deal:  high-leveraged, fixed rate, assumable, non-recourse fully amortizing financing for 35-40 years. Terms like that went out with right on, power to the people, make love not war, and Gas-$.53/gallon.  I must confess that I still try to use Daddio and swell as often as I can even though those terms pre-date the ‘70s. Still, people often get frustrated by the time an FHA deal will take, perhaps because their lender kind of soft pedals that discussion. I have found that the easiest approach to signing up business is to tell the client every bad thing I can think of that can happen with their deal, thinking that if those items don’t kill the deal, then perhaps we are on to a deal that is likely to close. In that vein, let’s outline generally the timing and process for a 221 (d) 4 new construction, which is generally mirrored with a (d) 4 Substantial Rehabilitation loan. I stress general time frames as any number of individual problems can slow a deal down-flood plain issues or other environmental issues require time to be cured.  Zoning and NIMBY (not in my backyard) problems slowed a deal of ours last year for 6 months before we got back on track.  Things extraneous to FHA should not be used as a reason why one complains about FHA. So here goes with the timing and the process: DAY 1: Signing the Engagement Letter.  Typically a small processing fee (usually $2,000) and funds for a rent comparable survey or a mini market survey will be due at this time, in order to prepare a Concept...